Using Your Tax Refund to Invest in Treasury Securities

April 28, 2004 — Looking for a good place to stash the cash from your income tax refund?

Treasury bills, Treasury notes, Treasury bonds or Treasury Inflation-Protected Securities (TIPS) may be the right investment for you.

With terms as short as four weeks and as long as 30 years, Treasuries offer remarkable versatility. You can use them to grow your money for that new roof you plan to put on the house this summer or for the college education you are planning for your newborn child.

With Treasuries, you enjoy:

Flexibility. You can sell a Treasury bill or note at anytime. So, if you need money in a hurry for some unexpected expense, your hands aren't tied. Also, by selling whenever you wish, you may be able to cash in on fluctuating interest rates on the open market.

Security. Backed by the full faith and credit of the U.S. Government, Treasury bills and notes are virtually risk-free.

Tax Advantages. Earnings from Treasury bills, notes, bonds and TIPS are exempt from state and local income taxes.

Inflation Protection. A special kind of note called TIPS protects your investment against inflation. (Treasury notes in general and Treasury bills do not provide this benefit.)

How do you buy?

Open an account, and then you can buy Treasuries directly from us on the web.